LICKING RURAL ELECTRIFICATION, INC. (dba)
THE ENERGY COOPERATIVE
ADDING VALUETO OUR COMMUNITY
ANNUAL REPORT • 2014
VALUE:[val-yoo] noun 1. the importance, worth or usefulness of something.
ANNUAL REPORT • 2014
CONTENTSMESSAGE FROM THE PRESIDENT: 2
PRESIDENT/CEO REPORT: 3 – 4
SAFETY & ADMINISTRATIVE REPORT: 5 – 6
LICKING RURAL ELECTRIFICATION REPORT: 7
NATIONAL GAS & OIL COOPERATIVE REPORT: 8
NGO DEVELOPMENT CORPORATION REPORT: 9
NGO PROPANE COOPERATIVE REPORT: 10
NGO TRANSMISSION REPORT: 11
PRODUCERS GAS SALES REPORT: 12
MARKETING • PUBLIC RELATIONS REPORT: 13 – 14
FINANCIAL STATEMENT: 15 – 16
TREASURER’S REPORT: 17
BOARD & MANAGEMENT STAFF: 18
COMMITTEDTO PROVIDING SAFE AND RELIABLE ENERGY
Adding value so that members can have a better quality of life. That was the purpose for which cooperatives were created and that’s our reason for The Energy Cooperative existing today.
Seventy-nine years ago, Licking Rural Electrification, now doing business as
The Energy Cooperative, was created by a group of local, rural residents who knew they had the power to change their community—and they certainly did. Today, those founding members would be amazed to see that their little cooperative has grown to be the second
largest cooperative in Ohio, with five separate business segments under one umbrella, span-ning nine counties in Central Ohio and serving over 62,000 member-consumers.
However, one thing hasn’t changed; we’re still your cooperative. As a not-for-profit, member-owned entity, we strive to serve you, our members. We are committed to providing safe, reliable and affordable energy. After 79 years, The Energy Cooperative is still adding value to our community by providing energy services.
While we take a look back at 2014 in this annual report, know that we are also looking to the future. This is your cooperative, created by members and growing to serve generations to come.
COMMITTED: [kuh-mit] verb (usedwithobject),committed,committing 1. to give in trust, to pledge or engage oneself.
Best Regards,
Todd P. WarePresident/CEO of The Energy Cooperative
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Todd Ware
ELECTRIC • NATURAL GAS • PROPANE
The Energy Cooperative Headquarters • Newark • OH
CONTENTSMESSAGE FROM THE PRESIDENT: 2
PRESIDENT/CEO REPORT: 3 – 4
SAFETY & ADMINISTRATIVE REPORT: 5 – 6
LICKING RURAL ELECTRIFICATION REPORT: 7
NATIONAL GAS & OIL COOPERATIVE REPORT: 8
NGO DEVELOPMENT CORPORATION REPORT: 9
NGO PROPANE COOPERATIVE REPORT: 10
NGO TRANSMISSION REPORT: 11
PRODUCERS GAS SALES REPORT: 12
MARKETING • PUBLIC RELATIONS REPORT: 13 – 14
FINANCIAL STATEMENT: 15 – 16
TREASURER’S REPORT: 17
BOARD & MANAGEMENT STAFF: 18
Each year at this time, I reflect on the past year’s accomplishments and challenges, and it always seems impossible that another year has flown by. As I move into my fourth year as CEO, I continue to enjoy leading your cooperative every day and feel we continue to make great strides in moving the Energy Cooperative (TEC) forward. We had some very inter-esting events happen during 2014, some that were contained within the year and others that will carry over into 2015 and beyond.
Our number one goal continues to be the safety of our employees, members and the general public. We have a couple of entities within TEC that have gone more than eight years without a lost time accident, which is an excellent record. We continue to have better incident rates and days away/re-stricted or transferred (D.A.R.T) rates than both the state and national averages over the previous five years. The board has always maintained safety as our highest priority. We continue to work every day to improve our safety culture; I believe we are seeing those results in our improved safety record.
The year-end results for the cooperative were excellent again this year. We had positive income of over $5 million, a margin that allowed us to continue to grow our equity to 7.7percent. This growth is very exciting for TEC because we have spent many years working toward positive equity. Now we are work-ing toward improving our balance sheet even more. We continue to work hard to manage our expenses, while improving our member service.
The winter of 2014 was one of the coldest on record in our region. All of us remember those cold days in January 2014. Our members rely on us to provide electric, natural gas and propane services to them when they need it. I am happy to say that during those bitter cold days, our systems performed very well in delivering energy to you, our member-own-ers. In addition to our systems’ reliability, we identi-fied a few minor areas that needed improvement. We fixed these prior to the winter of 2014-2015.
As a cooperative, it is important to us that we provide you with the highest quality of member service. With that in mind, we constantly review all of the process-es we use every day to ensure that we make it easy for you to do business with us. As a member, you are an owner of the cooperative. We want to keep our owners satisfied as much as possible.
Each year, the board develops goals that ensure we keep moving forward with our strategic plan. Listed on page four are some of the goals and results for 2014.
Management reviews the board goals and sets objectives to meet them yearly. These objectives are included in our annual budget which is approved by the board of directors. Cost containment continues to be a major focus and has allowed us to operate more efficiently over the years. Our electric rates have remained fairly stable the past few years due to cost containment efforts and operational efficiencies. We have improved our electric reliability numbers over the past few years as a result of several projects. Both improved right-of-way maintenance and the replacement of failed cut-out switches have had the greatest effect on improving reliability.
The biggest driver of higher electric rates for the future is the potential cost increase of electric generation. Most of our electric energy comes from the Cardinal Power Plant on the Ohio River. While the Cardinal Plant is one of the cleanest coal-fired plants in Ohio, I am concerned that further EPA mandates for emissions controls will increase costs further. We will continue to monitor this situation, and may call on you to help us by contacting your legislator.
Natural gas costs have remained fairly low over the past few years, primarily as a result of the discovery of more gas fields in the United States, including the Utica Shale here in Ohio. The discovery of natural gas fields closer to our service area has allowed us to purchase gas from different sources. Since the gas is closer to us, the basis (locational value) has gone
PRESIDENT/CEO REPORTPrepared by TODD WARE, President/CEO of The Energy Cooperative
3 ELECTRIC • NATURAL GAS • PROPANE
ANNUAL REPORT • 2014
down significantly. We happily pass those savings on to you, the members. Natural gas costs should remain fairly stable for the next several years.
Propane costs during 2014 rose very sharply early in the year in response to the very cold beginning of winter. Once winter passed we saw prices drop then stay at lower levels. The addition of the liquids-rich natural gas finds in Ohio will help keep the long-term cost of pro-pane low, as it is a byproduct of the “wet” gas.
I look forward to what 2015 has in store for the cooperative. We have budgeted a generous amount of capital dollars that will lead to new and exciting possibilities as we prepare for the future. I am excited for the completion of our new substation in New Albany, and our contin-ued expansion into the Johnstown area with natural gas service. We will also be spending an increased amount on maintenance for our systems, with the biggest project being the re-placement of bare steel pipe and service risers.
The cooperative will be faced with many issues outside of our control over the next sev-eral years, which may affect the direction we take. I assure you that your management team will continue to work hard to contain costs, provide excellent service in a safe manner and deliver energy to you at a reasonable cost.
In closing, I would like to thank all the employees for their hard work and dedication. I would also like to recognize the Board of Directors for their diligent efforts on your behalf as we continue to move The Energy Cooperative forward.
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THE ENERGY COOPERATIVE
Board Developed Goals for 2014Goal Result5 yr./avg incident rate of less than 3.35 achieved 1.115 yr./avg D.A.R.T. rate of less than 1.50 achieved .45Develop Rural Electric Safety Achievement Program, safety improvement plan complete
Implement measures to reduce at-fault vehicle accidents complete
Achieve 3 yr./avg MDSC of 1.70 achieved 1.82
Achieve equity position of 6.82 percent achieved equity of 7.73 percent
Develop equity plan ongoing5 yr./avg electric outage hours of less than 2.30 achieved 2.05 yr./avg gas outages of less than 40 achieved 44Conduct ease of doing business initiative ongoing review of process
Member satisfaction rate of 89 percentachieved 90 percent for gas operations, 88 percent for electric operations
Develop five year marketing/brand strategy to be presented in 2015Install 5,000 gas AMI meters 5,850 installedMaintain natural gas losses of less than 3.0 percent achieved 1.4 percent
Maintain 5/yr. avg electric line loss of no more than 6.5 percent achieved 6.0 percent
Replace 12 miles of bare steel pipe completeReduce outstanding natural gas leaks by 12.5 percent reduced by 13 percent
Annual report on succession planning updated Board in October of 2014
Complete iPad deployment completeImplement mobile workforce applications ongoingCost reduction/containment ongoingMarket oil and gas leases for development ongoingIncrease ACRE/COPA membership 133 membersDevelop five year plan for NGO Development complete
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Improving our safety culture and ensuring the safety of our employees, members and the public is a way of doing business that has become a foundation driving most everything we do. Safety continues to be a core value for the cooperative. You depend upon us to provide safe and reliable service every day and we are committed to doing just that.
Our employees throughout all of our operations have continued to make safety a way of life, not just a program. We are extremely proud of them for their continued efforts to improve safe work habits and ensure not only that they go home safely every day but that their co-worker does too.
In the 2014 calendar year we reported two OSHA recordable incidents which resulted in an incident rate of 1.07. The incident rate measures the frequen-cy rate per 100 employees. We compare our incident rates to other electric cooperatives and natural gas companies throughout Ohio and the United States. We are very proud of our safety records and continue to have extremely favorable statistics that are below the industry average. This achievement is accom-plished through the diligent efforts our employees place on working safely, every day.
Last year our electric operations continued its commitment to the National Rural Electric Coopera-tive Association’s Rural Electric Safety Accreditation Program (RESAP) by developing a three-year Safety Improvement Plan. The RESAP is an accreditation that distinguishes those cooperatives that go above and beyond in the area of safety. Earning this accred-itation and continuing to meet the requirements set forth in this program, such as developing a Safety Improvement Plan, takes commitment and dedica-tion from all employees. Last year, we identified three specific areas where we are developing objectives to help improve our overall safety culture, and certify
that our safe work practices and equipment remain complaint with the various rules and regulations set forth for the electric industry.
From our natural gas operations we were very excited to learn that the
American Gas Association (AGA) developed a similar program to the electric RESAP, called the National Peer Review Program. The Peer Review Program is completely voluntary and allows other participating natural gas companies the opportunity to observe their peers, share leading work and safety practices, and identify opportunities for operational improve-ments. We quickly committed to participation in the Peer Review Program and are looking forward to sharing information and learning from others about the various safety initiatives set forth to continue the industry’s records of providing safe and reliable delivery of natural gas.
The cooperative received an Industry Leader Acci-dent Prevention Award at the 2014 American Gas Association (AGA) Operations Conference Awards Program held last year. This award was given to us because of our DART (Days Away/Restricted/Trans-ferred) incident rate for the prior year coming in be-low the industry average for similar size companies. This is a great accomplishment and true reflection of the safety conscious efforts our employees put in to their job every day.
SAFETY & ADMINISTRATIVE REPORTPrepared by CONNIE HOGUE, Director of Human Resources & Safety
SAFETY: [sayf-tee] noun 1.thequalityofavertingornotcausing injury, danger, harm or loss.
THE ENERGY COOPERATIVE
TEC Safety Committee
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In 2014, we purchased several Automated External Defibrillation (AED) units as part of our continued commitment to introduce new safety technology in the cooperative. These AED units are light weight, portable and designed to be used by nonmedi-cal professionals. They are an important part of emergency response programs and may be vital to improving survival from cardiac arrest. All of our field personnel have been properly trained and certified on how to use the AED unit in the case of a life-threatening cardiac event.
We made great strides last year in reducing our overall vehicle at-fault incidents by 42 percent. This reduction was a result of several safe work practices implemented last year. One of these safe work practices was actually quite simple, yet made a huge difference in the number of backing accidents that can occur. Our employees began backing in or pulling through a parking space so they are never looking behind them when exiting. This simple step cut our backing incidents in half.
We continue to closely watch our human resources and employee benefits to ensure they comply with all of the health care and employment law changes that have occurred over the past few years. We had lower health care costs during 2014 and continue to trend lower than the national average.
Our board of directors and management remain very committed to our succession planning efforts. Succession planning continues to be an important component of the Cooperative’s strategic and future planning processes. We will continue to provide specialized training and exposure to our employees to ensure that we stay on track in preparing our future leaders for success.
COMMITTED TO PROVIDING SAFE AND RELIABLE ENERGY
ANNUAL REPORT • 2014
SAFETY...We’re Raising the Bar
Safety Training Electric Safety Demonstration
Safety Training Safety Award Recipients Natural Gas Safety Display
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Licking Rural Electrification (LRE) provides safe, reli-able electricity to 25,021 members in nine counties of Central Ohio. In 2014, LRE added 270 new services to its system. LRE owns, operates, and maintains 32 miles of transmission line, 3,072 miles of distribution lines, 19 substations, and three switching stations.
Safety is the highest priority for our employees and the general public. In 2013, LRE was re-certified for RESAP (Rural Electric Safety Accreditation Program), receiving very high marks. This program identifies the strengths and weaknesses within the operations of the electric division. As part of the RESAP this year we developed a three year Safety Improvement Plan to target areas that need improvement. As part of LRE’s educational program, we present Electric Safety Demonstrations to schools, first responders and during community events. As of December 31, 2014, LRE has gone 3,049 days (8.4 years) without a lost time accident. This is a safety accomplishment we are extremely proud of.
In 2014, a decision was made to build a new substa-tion in the New Albany/Johnstown area. Capacity limitations and reliability concerns for the member/owners in the areas of Johnstown, New Albany, and Beechwood prompted this decision. We anticipate energizing this station by July 2015.
LRE has several programs designed to improve reliability and extend the life of our existing facilities. Our pole inspection program is one example. We inspect and treat about ten percent of our poles each year, identifying decayed and dangerous poles. This helps reduce the number of outages and increases safety for the general public. This year alone we in-spected 5,726 poles. In addition to pole inspections, we are replacing cutouts* that have been identified as defective. This proactive program has proven to ex-ponentially decrease outages. LRE replaced a total of 1,099 cutouts this year. In 2014, we continued to add animal protection to our poles and transformers to eliminate outages created by small animals. Inspect-ing a percentage of our underground facilities each year also has allowed us to identify problems inside pad-mounted transformers and secondary cabinets before they fail.
In 2014, we trimmed 400 miles of line, mowed 198 miles, and applied herbicide to 133 miles of right-
of-way to retard the growth of undesired vegetation. We re-moved a total of 4,727 dangerous trees from the system that could
have posed a reliability concern. We are currently on a five year vegetation program rotation cycle. These are just a few of the programs in place to provide safe, reliable electric energy to our member/owners.
* Cutout: also knows as a fuse cutout switch. In electrical distribution, this equipment protects transformers from current surges and overloads. The replacement of a cutout can improve safety and reliability.
LICKING RURAL ELECTRIFICATION REPORTPrepared by GARY GLOVER, VP/COO of Electric Operations
POWER: [pou-er] noun 1.abilitytoactorproduceaneffect,capability of doing or accomplishing something.
ANNUAL REPORT • 2014
Smith’s-Mill Substation Groundbreaking
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National Gas & Oil Cooperative provides natural gas service to more than 33,000 residential and commer-cial members within a six county area. This service is provided through a network of nearly 1,000 miles of distribution pipelines. We are committed to providing our members with safe and reliable natural gas service.
As part of a major initiative to install new pipeline infrastructure, we connected 458 new members last year and installed more than 34 miles of new distribution mains for new growth. Most of the new growth mains were installed in the Johnstown area as part of a five year planned expansion. The infra-structure replacement initiative included 12 miles of distribution mains, 400 services lines and 1,100 risers.
The Advanced Metering Infrastructure (AMI) program is in its third year of implementation with more than 17,000 units installed. This equipment sends meter reading by wireless communication, improving accuracy and timeliness while reducing expenses. With the AMI, program we have experienced a reduc-tion in carbon emissions, fuel costs and manpower because we are not required to physically send out meter readers.
We also continued efforts to reduce the cost of natural gas by bringing in gas supply from the shale drilling areas of Ohio and Pennsylvania. Having access to these recently-developed resources lowers the transportation cost and provides more market competition for gas pricing. The staff will continue to explore ways to reduce costs and find alternatives for natural gas supply. IGS Energy is also supplying natural gas and offering a fixed price to eligible consumers who want price certainty.
Last year, our members consumed more than 30 million ccf of clean burning natural gas, a significant increase over the previous year. This increase in consumption was mostly the result of bitter winter weather experienced in 2014. However, the overall trend is for cooperative members to use less natural gas as a result of conservation programs and more efficient appliances.
NATIONAL GAS & OIL COOPERATIVE REPORTPrepared by DAN MCVEY, VP/COO of Gas Operations
PROVIDE: [pruh-vahyd] verb 1. to make available; supply, equip.
THE ENERGY COOPERATIVE
ELECTRIC • NATURAL GAS • PROPANE
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NGO Development Corporation owns interest in more than 650 oil and natural gas wells in Central Ohio. Many of these wells provide natural gas supply to the cooperative’s pipeline system. Oil and natural gas reserves total more than 230,000 barrels and nearly 5,000,000 Mcf respectively. Monthly produc-tion averages more than 2,000 barrels of oil and 50,000 Mcf of natural gas.
This past year we drilled our first shallow Clinton horizontal well in Coshocton County. The well is part of an initiative to apply horizontal drilling technology to the well-defined Clinton sandstone reservoir.
We also assumed operations of a well drilled to the Utica Shale in Coshocton County and have started flowing the gas into our pipeline system. This well will help define the western area of the Utica Shale play.
Currently we have more than 100,000 acres of land under lease for future oil and natural gas develop-ment. Most of this acreage is located within reach of the pipeline system, which helps assure the availability of local crude oil and natural gas supply.
NGO DEVELOPMENT CORPORATION REPORTPrepared by DAN MCVEY, VP/COO of Gas Operations
ELECTRIC • NATURAL GAS • PROPANE
THE ENERGY COOPERATIVE
ENERGY: [en-er-jee] noun 1.theabilitytoact,leadothers,effect. 2. an adequate or abundant amount of such power.
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NGO Propane Cooperative provides propane service to more than 4,100 members. The delivery trucks traveled more than 70,000 miles and drivers made more than 10,000 deliveries in all kinds of weather conditions, proving our commitment to providing our members safe, reliable propane service.
Members of the cooperative consumed nearly three million gallons of propane last year. Last winter, we had adequate supplies from our propane supply sources, giving our members the security of knowing they would have propane when needed.
We continue to focus on providing affordable fixed-price propane with metered service. This helps mem-bers budget for their energy needs and avoid price increases that sometimes occur during the winter season. The metering option allows members to pay for only the propane they use each month and avoid a costly tank refill.
As part of our commitment to community, we now have two delivery trucks with special colors and decals that promote cancer awareness and provide support to help find a cure!
NGO PROPANE COOPERATIVE REPORTPrepared by DAN MCVEY, VP/COO of Gas Operations
ANNUAL REPORT • 2014
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NGO Transmission provides natural gas service to both affiliates and non-affiliates through a network of 171 miles of transmission pipelines and three underground gas storage fields. These gas storage fields help balance the transmission system and can provide up to half of the daily supply needs.
The primary goal of NGO Transmission is to provide firm gas delivery service to the consumers of National Gas & Oil Cooperative and Producers Gas Sales. Transportation opportunities are also available for any qualifying gas shippers within Ohio. Transmission personnel also monitor outages, dispatching crews to perform restoration operations from our integrated Control Center.
NGO TRANSMISSION REPORTPrepared by DAN MCVEY, VP/COO of Gas Operations
ANNUAL REPORT • 2014
INVESTING IN OUR YOUTH:Investing in our future means investing in our youth. Today’s children will become future homeowners, business owners and the leaders of our communities. As a cooperative, it is important to instill in our youth an understanding of what it means to be a cooperative owner and to show them the cooperative difference. That is why we proudly provide more than $25,000 in scholarships to high school seniors, along with a fully paid, week-long trip to Washington D.C. to two sophomore or junior students.
CONSISTENT: [kuh n-sis-tuh nt] adjective 1. constantly adhering to the same principles, course, form, etc.
2014 Scholarship Recipients 2014 Scholarship Recipients
2014 Youth Tour Recipient
Producers Gas Sales operates as an affiliated on-sys-tem marketing company for large commercial and industrial consumers. Producers Gas Sales arranges for acquisition and transportation of natural gas through the pipeline system to our large consumers. The volume of gas transported to large commercial and industrial consumers represents more than half of the total gas sold or transported on the transmis-sion and distribution systems.
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RELIABLE: [ri-lahy-uh-buh l] adjective 1. that may be relied upon or
trusted; dependable in achievement, accuracy, honesty, etc.
PRODUCERS GAS SALES REPORTPrepared by DAN MCVEY, VP/COO of Gas Operations
THE ENERGY COOPERATIVE
OUR MISSION STATEMENT:To provide safe and reliable energy to our
member-owners with highly responsive service, consistent with the Cooperative Principles.
COOPERATIVE MEMBERSHIP:Unlike investor-owned utilities, cooperatives are owned by the people they
serve. Members are the reason cooperatives exist. Each cooperative member has a voice in how the cooperative is run and a vote when it comes to things
such as electing directors to represent their best interests.
There are many types of cooperatives. While the memberships and objectives of each cooperative are different, they are alike when it comes to
following the seven principles of cooperatives:
1. Voluntary and open membership2. Democratic member control
3. Economic participation by members4. Autonomy and independence
5. Education, training and information6. Cooperation among cooperatives
7. Concern for community
Producers Gas Sales Consumer
2014 Elected Board Directors
2014 Annual Meeting 2014 Annual Meeting
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This past year, the Marketing and Public Relations Department took advantage of several opportunities to increase awareness of The Energy Cooperative (TEC) brand throughout the service territory. In January, The Energy Cooperative Times, the mem-ber newsletter, expanded to sixteen pages. The chal-lenge of putting together six, bi-monthly newsletters that inform, educate and entertain is significant.
Our team accepted the challenge and has done a masterful job of producing a publication that gives the members a valuable communications tool.
Social Media is playing a bigger role than ever in promoting public awareness of energy efficiency, community support and outage information. TEC’s Facebook and Twitter pages picked up nearly 5,000 new “likes,” 2,000 more than 2014. This year, TEC’s Facebook page was recognized as one of the most successful Facebook pages among Ohio cooperatives. It is predicted we will reach 10,000 likes by the end of 2015.
Our special events throughout the year are always popular with our members, and this year was no exception. A new event in 2014, Earth & Energy Day, focused on educating our members on energy savings, being earth friendly and practicing safety at home. Hosted at our Utica Service Facility, hundreds of members and their families enjoyed a day of learn-ing safety tips, earth science, nature and how TEC promotes energy efficiency.
Kids Day remains The Energy Cooperative’s signature event. Held at The Works in downtown Newark, near-ly 3,000 member/owner families enjoyed everything
MARKETING • PUBLIC RELATIONS REPORTPrepared by GARY BAKER, Director of Marketing & Public Relations
THE ENERGY COOPERATIVE
Habitat for Humanity Kids Day Savings Expo
Cardinal Power Plant Tour
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MEMBER: [mem-ber] noun 1. a person or group that is part of a society, community or other bodyororganization.from pony rides, hot dogs, great music and bouncy houses, to our electric safety demonstration team.
We are proud to report that the National Rural Electric Cooperative Association recognized TEC on a national level with a Spotlight on Excellence Award for Best Annual Report. The cooperative also earned state level recognition from the Ohio Rural Electric Cooperatives’ Communications Program for Best Photography in our newsletter, plus an award for Best Use of Electronic Media for our board candidate videos.
Our approach to strategic marketing started to shift this past year with more emphasis on selecting high-profile community partners. While TEC continued its support of Licking Memorial Health Systems, we created new partnerships with the Knox Community Hospital Foundation and Genesis Hospital Foundation in Muskingum County. For years, TEC has supported our county fairs. In 2014 we applied a longer-term strategy by increasing visibility of TEC brand with more signage and spon-sorship. The 4-H programs and county fair traditions are a very important part of our core members’ lives and values.
In 2014 the focus of Marketing and Public Rela-tions was to continue to increase public awareness, support the cooperative’s commitment to safety and community, and educating members on ways to save energy and money.
ANNUAL REPORT • 2014
ELECTRIC • NATURAL GAS • PROPANE
Kids Day Bike Raffle Winner Kids Day Kids Day
Earth & Energy Day
Earth & Energy Day
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FINANCIAL STATEMENT Prepared by Pat McGonagle, VP/CFO INCOME STATEMENT
ANNUAL REPORT • 2014
Income StatementYear Ending December 31, 2014
Revenues
Residential and Commercial Sales $ 95,109,994
Industrial Gas Sales 26,339,486
Oil and Gas Production 10,253,388
Interest and Non-Operating, Net 2,696,135
Total Revenues $ 134,399,003
Expenses
Purchased Energy $ 75,139,777
Operations and Maintenance 15,601,552
Administrative and General 12,118,610
Depreciation and Depletion 11,474,231
General Taxes 5,869,453
Interest 9,318,883
Total Expenses $ 129,522,506
Patronage Capital Credits $ 2,741,772
Income Tax (Benefit) Expense $ (717,323)
Other Comprehensive Income (Loss) $ (2,601,584)
Comprehensive Income $ 5,734,008
Patronage Capital
Capital Credits Refunded
Prior to 2002 $ 7,455,216
2003 40,051
2004 40,913
2005 36,634
2006 51,299
2007 49,188
2008 44,556
2009 68,439
2010 85,428
2011 64,292
2012 96,760
2013 79,692
2014 98,402
Total Refunded $ 8,210,870
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THE ENERGY COOPERATIVE
Balance Sheet Year Ending December 31, 2014
Assets
Property, Plant and Equipment, Net $ 196,588,284
Investments $ 34,751,775
Current Assets
Cash and Cash Equivalents $ 2,009,960
Accounts Receivable, Net 16,942,970
Gas in Underground Storage 3,596,808
Materials and Supplies 2,516,705
Prepaids and Other 600,938
Total Current Assets $ 25,667,381
Other Assets
Prepaid Taxes $ 41,719
Long-Term Receivables 1,445,481
Total Other Assets $ 1,487,200
Total Assets $ 258,494,640
Liabilities & Equity
Current Liabilities
Accounts Payable $ 13,157,956
Accrued Property and Other Taxes 4,281,796
Current Maturities of Long-Term Debt 6,516,001
Note Payable - Line of Credit 4,500,000
Other 9,290,473
Total Current Liabilities $ 37,746,226
Long-Term Liabilities & Equity
Long Term Debt, Net of Current Portion $ 180,033,043
Other Accrued Liabilities 20,738,557
Patronage Deficit 19,976,814
Total Long-Term Liabilities & Equity $ 220,748,414
Total Liabilities & Equity $ 258,494,640
FINANCIAL STATEMENT BALANCE SHEET
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For the year ended December 31, 2014, the Board of Directors engaged GBQ Partners LLC to perform an audit of the cooperatives’ books and records. GBQ has extensive experience in auditing both utilities and cooperatives. On March 18, 2015, GBQ issued the audit report for the year ended December 31, 2014. The audit report contained an unmodified opinion, which in accounting terms is a clean opinion from the auditor.
As of December 31, 2014, your cooperative had total assets of approximately $258.5 million, which includes $196.6 million in net plant assets. At the end of 2014, we had $34.8 million of patronage capital in other cooperatives, including Buckeye Power and Cooperative Finance Corporation (CFC). Also included in total assets was over $2.0 million in cash and short-term investments. Total liabilities were $239 million as of year-end.
In 2014, total combined revenues for the coopera-tives were over $133 million. Gross margin for 2014 totaled approximately $59 million. Total expenses for the year were $130 million, of which $75.1 million was for purchased energy. Operating expenses for
2014 were $54 million. Net income for 2014 was $8.3 million. Consolidated comprehensive income for the year was $5.7 million.
The cooperative has equity of $20 million as of the end of 2014. Equity for the combined entities has grown to 7.73 percent. Our lender, CFC, will consider allowing the payment of capital credits once the cooperative reaches an equity position of 20 percent.
Individual results by entity are as follows: Licking Rural Electric recorded comprehensive income of $5.3 million for the year. National Gas finished 2014 with comprehensive income of $2.5 million, while NGO Transmission had comprehensive income of $13,000. NGO Development showed a comprehen-sive loss of $2.3 million. NGO Propane had com-prehensive income of $182,000. The cooperatives invested nearly $18 million in new plant assets during 2014.
As of December 31, 2014, The Energy Cooperative serves more than 62,000 members combined. During 2014, we paid
out approximately $5.9 million in taxes and retired over $98,000 in patronage capital credits to estates.
If you have additional questions about this financial report, please contact the office at 1-800-255-6815.
TREASURER’S REPORTReported by JOHN KLAUDER, District 6 Director, CCD. BL
COOPERATIVE: [koh-op-er-uh-tiv]adjective 1.workingoractingtogetherwillingly
for a common goal.
THE ENERGY COOPERATIVE
COMMITTED TO PROVIDING SAFE AND RELIABLE ENERGY
Muskingum County Fair Kids Day Earth & Energy Day
Donald Hawk, CCD, BL District 1
Vice Chairman
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COOPERATIVE LEADERS
MANAGEMENT STAFF:
John Parkinson, CCD, BL District 5
Dan Dupps, CCD, BL District 4
Jack Schmidt, CCD, BL District 3
Nelson Smith, CCD, BL District 2
Chairman
John Klauder, CCD, BL District 6
Secretary/Treasurer
Tom Graham, CCD, BL District 9
Joanne Little, CCD, BL District 8
Dustin Buckingham, CCD, BL District 7
BOARD OF DIRECTORS:
Connie HogueDirector of HR & Safety
Allison SaffleController & Director of
Member Services
Lija Kaleps-ClarkDirector of Land &
Legal Services
Gary BakerDirector of Marketing & PR
ANNUAL REPORT • 2014
THANK YOU: Additionalrecognitiongoes to the 165 employees of The EnergyCooperativewhoarecommittedtoadding value to our community by providing safe,affordableandreliableenergy, day in and day out.
Todd WarePresident
Gary GloverVP/COO, Electric Operations
Dan McVeyVP/COO, Gas Operations
Pat McGonagleVP/CFO
Margy KleinExecutive Assistant
ANNUAL REPORT • 2014
ELECTRIC • NATURAL GAS • PROPANE
THE ENERGY COOPERATIVE VISION STATEMENT: Thatourmember-ownerstrulybenefitfrom theirmembershipinTheEnergyCooperative,
by receiving safe and reliable energy and highly responsive service at fair and reasonable prices. Andthatthecommunitiesweserveareenhanced
due to our presence.
THE ENERGY COOPERATIVE • 1500 GRANVILLE ROAD • NEWARK • OH • 43055 WWW.THEENERGYCOOP.COM • (800) 255-6815
ADDING VALUETO OUR COMMUNITY
